by Tim Mullaney, USA TODAY

by Tim Mullaney, USA TODAY

Banks are slightly loosening standards for many kinds of loans, and cutting into their own profit margins to try to make more loans, especially to businesses and real estate developers, the Federal Reserve says.

The central bank's quarterly survey of bank lending officers said most banks haven't made it materially easier to get business loans and commercial real estate loans in the last three months. But more than half of banks said they are accepting interest rates that are closer to what banks themselves pay for deposits, or other sources of money they lend out, according to the survey released Monday.

The report is one of the Fed's primary ways of assessing how credit is making its way into the economy, powering both business investment and consumer spending. Demand for car loans rose since the October report, and demand for mortgages was little changed, the Fed reported. About 16% of banks said they are easing car borrowing standards slightly, including lengthening the maximum term of auto loans and down-payment requirements.

"This is another sign that the economy is gaining traction,'' said Andrew Wilkinson, chief economic strategist at brokerage firm Miller Tabak. "While interest rates will likely remain low for a long time, the Fed is unlikely to need to keep the pedal to the metal in terms of bond purchases as 2013 develops.''

Banks are also trimming their markups, also known as spreads, on car loans, but have not been willing to make the same concessions to credit card customers, the Fed found. Standards for new credit cards remain tight, the Fed said: Just over 90% of banks said their standards for approving credit cards haven't changed since the fall.

The report shows few signs that banks are returning to the business of offering high-risk credit, as they did in the middle of the last decade.

More than 20% of banks said they have actually tightened standards for "subprime'' residential mortgages during the last three months. For mortgage loans to consumers with good credit, credit standards are still about the same, more than 90% of the banks said. Just fewer than 90% of banks reported no change in standards for home-equity lines of credit as well.

Demand for many loans is picking up, the Fed said. About a quarter of banks said they were seeing more applications for commercial loans, slightly less than the number that said they were seeing more applications for mortgages and cars.

Banks expect credit quality to improve this year in nearly all categories of loans, meaning fewer write-offs that cut into bank profits, the Fed said.